On the 2 April 2020, the European Securities and Markets
Authority (ESMA) updated its risk assessment to account for the
impact of COVID-19.
In the risk assessment, ESMA highlights that the COVID-19
pandemic has led to massive equity corrections, driven by sharp
deterioration in the outlook for consumers, businesses and the
economic environment. Furthermore, corporate bonds, government
bonds and investment funds are also showing signs of stress.
ESMA highlights that market infrastructures continue to function
in an orderly manner notwithstanding a massive increase in trades,
circuit breakers and derivatives margins.
Looking forward, ESMA predicts intermittent market rebounds,
even though a prolonged period of risk to institutional and retail
investors and further market corrections remain. With regards to
operation risks, ESMA sees a negative outlook, given the reliance
on remote-working arrangements, even though reports suggest that
business continuity plans are
